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Strategies & Market Trends : Natural Resource Stocks

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To: hubris33 who wrote (37150)	3/20/2006 9:41:17 AM
From: ItsAllCyclical	of 108649

(edit) GSS - We had this debate previously I think w/DEZ. I don't agree with your overall method of analysis so there's not much point in debating the conclusion. I think GSS's value will bear out, but this may be as much as a 2 year play before it really becomes apparent to most. I try to take into account cash on hand, cash needed, current production, production growth and potential for reserve increases for starters. You method doesn't address any of these. Also for a producer the numbers are closer to $200/ounce especially in a rising gold environment (what will that number look like w/$800 gold?). I'm buying GSS because it's one of the cheapest producers out there w/it's expected production/growth and reserves relative to market cap, but of course I'm also expecting it'll be even cheaper w/700-800 POG. I think GSS is undervalued by more like 75%-100% at current levels (but this may take a 1-2 year time frame w/approx 500+ POG to get realized by the market). If gold goes to $600+ in the meantime then old highs wouldn't be out of line imho. Also, not sure where you are getting your numbers, but according to the Jan presentation on their website they have over 10 mil ounces of resources and reserves which of course doesn't include the possibility for increases from Prestea and other properties. TA easier to see on Canadian side investorshub.com Again, I'm trying to keep a longer time frame on this one. I'm not crazy about management, but it's cheap enough that I think they'll have a hard time screwing things up over a 2 year+ time frame.

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